This Friday, July 10, marks the final deadline for millions of U.S. taxpayers to submit claims for refunds from the IRS for penalties and interest that were improperly charged during the COVID-19 pandemic, as highlighted by Telemundo 51.
Failing to act by the end of the day means permanently forfeiting this right.
Background on the Court's Decision
The opportunity arises from a decision by the United States Court of Federal Claims on November 25, 2025, in the case Kwong v. United States. The court ruled that the Internal Revenue Service (IRS) should not have imposed penalties for late filing or payment during the federal disaster period for COVID-19, which spanned from January 20, 2020, to July 10, 2023.
The National Taxpayer Advocate, an independent IRS oversight body, noted, "The court's logic indicates that the IRS should not have levied late filing or payment penalties during this 3½-year period or accrued interest on those amounts."
Who Qualifies and How to Claim
Tens of millions could qualify for refunds or penalty reductions. However, this benefit is not automatic; each taxpayer must file a formal claim by this Friday's deadline.
Erin M. Collins, the National Taxpayer Advocate, warned in April that low- or moderate-income taxpayers are at a higher risk of missing this chance.
"Many affected taxpayers have lower or moderate incomes and are less likely to have professional representation or be informed of complex legal developments like this," she stated.
The eligibility is extensive. It includes those who filed late returns and paid penalties between January 20, 2020, and July 10, 2023, those who still owe the IRS penalties—even if unpaid—and those who filed late international informational returns.
Eligible parties include individuals, small businesses, large corporations, estates, and trusts.
To file a claim, taxpayers must complete IRS Form 843—Claim for Refund and Request for Abatement—and mail it, as electronic submissions are not accepted. Experts suggest writing "Protective Refund Claim Pursuant to Kwong Case" at the top of the form to safeguard rights while the litigation continues.
Details on Filing and Potential Refunds
Filling out the form requires knowledge of the penalties or interest paid and the relevant fiscal year. This information can be found in IRS letters or the tax account history on IRS.gov.
Recoverable amounts include late filing penalties, late payment penalties, and, in some cases, accrued interest.
Ongoing Legal Proceedings
The case remains in litigation, as both the IRS and the Department of Justice disagree with the court's interpretation and plan to appeal. The government has until July 20 to submit its formal defense in the appeal.
Experts agree that taxpayers should not wait for the litigation to resolve, as legal deadlines for claims remain unchanged. Filing a protective claim this Friday does not ensure immediate refunds but preserves the right to receive them should the courts ultimately uphold the decision.
"For taxpayers facing financial pressure, these refunds can make a significant difference. However, most must act before July 10, 2026, to seek potential refunds," Collins concluded.
FAQs on IRS Penalty Refund Claims During COVID-19
Who is eligible for a refund?
Eligibility includes individuals, small businesses, large corporations, estates, and trusts who filed late returns and paid penalties between January 20, 2020, and July 10, 2023, or who still owe penalties to the IRS.
How can a taxpayer file a refund claim?
Taxpayers must complete IRS Form 843 and mail it, as electronic submissions are not accepted. Writing "Protective Refund Claim Pursuant to Kwong Case" on the form helps preserve rights while the case is ongoing.
What types of penalties can be refunded?
Refundable penalties include late filing penalties, late payment penalties, and in some cases, accrued interest.
What is the deadline for filing a claim?
The deadline for filing a refund claim is July 10, 2026. Taxpayers must submit their claims by this date to preserve their right to a potential refund.